March 6, 2013: New York Invests in CHP to Generate On-Site Power and Heat During Grid Outages

ALBANY, N.Y. — Gov. Andrew Cuomo has announced $20 million in funding to support combined heat and power (CHP) projects that will provide continuous on-site power and heat during grid power outages. These projects are in support of recommendations made by the governor’s NYS 2100 Commission in the aftermath of Hurricane Sandy. These CHP projects are intended to provide manufacturers, apartment buildings, hospitals, universities, and other large buildings the ability to produce a portion of their own electricity and heat.

“Investing in combined heat and power technology will help keep our electric grid reliable and efficient, and make our businesses more competitive,” said Cuomo. “In the wake of Hurricane Sandy, we have learned the value and importance of having clean energy technologies like CHP in place that will keep the lights on and systems running for our residents and businesses.”

CHP, also known as cogeneration, involves the capture of heat produced during electricity generation and the use of it to provide on-site heat or hot water for buildings, for manufacturing, or for other purposes.

These installations are capable of achieving higher levels of fuel efficiency by simultaneously producing both electric power and useful thermal energy at the facility where the energy is needed. This localized generation can both reduce a facility’s vulnerability to electric distribution system outages and decrease peak demand on the electric grid. Power created at the customer site also avoids inherent energy losses during transmission and distribution.

This program, administered by the New York State Energy Research and Development Authority (NYSERDA), will only fund CHP systems that can continue to operate during a grid outage. In addition, all applicants in flood zones must install systems in locations that would be “high and dry” in the wake of a worst-case flood scenario.

“Governor Cuomo has called for making the state’s infrastructure more resilient in the face of extreme weather like we witnessed with Hurricane Sandy. Through the use of combined heat and power technology, building owners can make that happen,” said Francis J. Murray Jr., president and CEO, NYSERDA. “CHP systems can benefit our metropolitan areas in many ways, from easing air pollution to reducing fossil-fuel consumption, as well as reducing the pressure on the electric grid in times of great need.”

To further incentivize projects in densely-populated New York City, projects in the city and lower Hudson Valley will receive slightly higher funding, based on a sliding scale. In addition, this program will provide 10 percent more funding to projects that can power an official “facility of refuge” — a shelter to be used in times of emergency — as recognized by the American Red Cross or the local Office of Emergency Management.

The program will pay an incentive of up to $1.5 million per project for installing equipment approved by NYSERDA and installed by approved CHP system vendors. Projects can be as small as 50 kilowatts and as large as 1.3 megawatts, based on building requirements. Incentive amounts will be available on a first-come, first-served basis until Dec. 30, 2016 or until all funds are committed. Only CHP systems installed at sites that pay the System Benefits Charge (SBC) are eligible for incentives.